Planet Money Tariffs: What are they good for?
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Apr 2, 2025 Exploring the role of tariffs, the conversation reveals how these import taxes have historically sparked debate between protectionism and free trade. A lone economist defends tariffs as crucial economic tools, particularly within the context of the Trump administration. The story of Hyundai illustrates the power of government support in nurturing industries. Additionally, the podcast delves into how tariffs can function as a means of political influence, reshaping international relations and industry growth.
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Free Trade's Trade-offs
- Free trade has downsides, including job losses due to foreign competition.
- Economists and lawmakers previously prioritized free trade's benefits, but are now acknowledging the costs.
Hyundai's Success with Tariffs
- Hyundai, initially a construction company, became a car manufacturer with government support and tariffs.
- South Korea banned foreign car imports to protect its infant auto industry.
Infant Industry Protection
- Infant industry protection involves using tariffs and subsidies to help new industries grow.
- These protections must be temporary to avoid creating inefficient, perpetually subsidized companies.
